Fixed-indemnity insurance plans offer a cash benefit payout in case you suffer from specific illnesses. A fixed-indemnity insurance plan is a type of supplemental health plan that gives you a fixed cash benefit payout in case you experience specific illnesses or injuries covered by your policy. For some consumers, a fixed-indemnity insurance plan is a helpful add-on to a regular health insurance plan, as it helps cover out-of-pocket costs for medical expenses they expect to incur during the year.
Understanding fixed-indemnity insurance prior to choosing a fixed-indemnity insurance plan, it’s important you understand what such a health plan entails.
A fixed indemnity plan pays a predetermined amount of money for any qualified medical services you receive. Because the benefit is preset and paid to you regardless of total bill for qualified service, fixed indemnity coverage is sometimes called fixed benefit insurance or fee for service insurance. The money you receive can be used to pay unexpected medical bills or everyday expenses.
Short-term plans are temporary coverage with limited benefits. They are not ACA-compliant, don’t cover pre-existing conditions and are not guaranteed-issue. You may still be subject to the tax penalty up until 2019.
Fixed-indemnity insurance plans are not always guaranteed issue, so you may still have to go through the medical underwriting process when you purchase such a plan.
If major medical health insurance is not an option due to your particular health and financial needs, a fixed-benefit indemnity plan may ultimately be the best solution for you. However, remember that it’s always a good idea to enroll in a major medical health insurance plan, and you can do this during the annual Open Enrollment Period (OEP) or during a Special Enrollment Period (SEP) if you qualify.